Weak oil demand to lower GCC growth: IMF

The International Monetary Fund (IMF) expects lower economic growth in the Gulf Cooperation Council (GCC) countries in 2012 with weaker global demand pushing down oil production.

Masood Ahmed, the IMF’s director for Middle East and central Asia, was widely quoted in GCC media outlets as predicting average economic growth of 5.3 per cent in 2012 compared to 8 per cent in 2011.

“On the long-term there is a downside risk on global oil prices,” Ahmed was quoted as saying. “If there is a sustained slowdown in Europe, then this will affect oil prices.”

In 2011, the GCC countries were shielded from the economic downturn in Europe because of high prices and increased crude production, compensating for the shortfalls caused by the drop in Libyan output.

Ahmed was reported as saying that GCC countries no longer need to make up for weaker Libyan output because the North African country would have recovered to the 1.6 million barrels per day they were producing before the Arab Spring broke out in February, 2011.

The IMF predicts growth for the Middle East and North Africa as a region to rise to 5 per cent from 4 per cent last year. The increase comes from countries gradually recovering after the Arab Spring in 2011 caused disruptions across the region.

The International Monetary Fund (IMF) expects lower economic growth in the Gulf Cooperation Council (GCC) countries in 2012 with weaker global demand pushing down oil production.

Masood Ahmed, the IMF’s director for Middle East and central Asia, was widely quoted in GCC media outlets as predicting average economic growth of 5.3 per cent in 2012 compared to 8 per cent in 2011.

“On the long-term there is a downside risk on global oil prices,” Ahmed was quoted as saying. “If there is a sustained slowdown in Europe, then this will affect oil prices.”

In 2011, the GCC countries were shielded from the economic downturn in Europe because of high prices and increased crude production, compensating for the shortfalls caused by the drop in Libyan output.

Ahmed was reported as saying that GCC countries no longer need to make up for weaker Libyan output because the North African country would have recovered to the 1.6 million barrels per day they were producing before the Arab Spring broke out in February, 2011.

The IMF predicts growth for the Middle East and North Africa as a region to rise to 5 per cent from 4 per cent last year. The increase comes from countries gradually recovering after the Arab Spring in 2011 caused disruptions across the region.